Over 20 million jobs in the poultry industry are on the verge of being lost as prices of eggs and chickens skyrocket amid scarcity of livestock feeds caused by shortage of maize and soya beans in the last few months, reports KUNLE AKINRINADE.
Samson Adekoya was least prepared for the tempest the poultry industry has encountered in the last few months. In the past 15 years, his flourishing poultry in Gudugba part of Ewekoro Local Government Area, Ogun State has been the economic pillar through which he was able to sponsor his three children’s university education and build a duplex for his family aside a few other properties he had acquired in Lagos and Ogun communities.
By this time last year, he had started reaping from the Yuletide boom with massive sale of chickens in preparation for Christmas and New Year celebrations. But in the last seven months, his business has become distressed with attendant loss of revenue and patronage due to scarcity of livestock feeds caused by scarcity of maize and soya beans, which has hit the industry like a volcanic eruption since the beginning of the year.
He said: “By this time last year, I had made a lot of money from selling chickens as the Yuletide drew closer. The reverse has been the case this time around. Scarcity of feeds has rendered business comatose, so much so that I am running the business at a loss because of the huge cost of poultry feeds.”
Like Adekoya, Augustine Boma, who runs a cottage feed mill processing centre in Ado-Odo/Ota Area of Ogun State, also lamented the astronomical rise in the prices of maize and soya beans, two major ingredients of poultry feeds.
Boma told The Nation that the business, which is his mainstay, was on the brink of collapse due to paucity of funds to purchase maize and soya beans at high rates to sustain the production of feeds amid low patronage by poultry farmers, many of whom had shut down their farms following the crisis caused by maize and soya beans scarcity in the country.
“The cost of procuring maize and soya beans is very huge nowadays,” he said. “I do not have enough money to purchase the grains whose prices continue to skyrocket every day.”
Joining in the lamentation is Ms Abidemi Johnson, an ex-banker turned poultry farmer in Alagbado area of Lagos, who invested the proceeds of the sale of an inherited apartment in the business five years ago, with a return on investment that was fairly impressive.
She explained that the crisis in the sector in the last few months had led to partial closure of the farm as she was running at a loss owing to problems associated with soaring feed prices.
She said: “Five years ago when I quit my job as a banker, I sold an inherited family property to set up my poultry business. It was a roller coaster experience for me because of the huge returns on investment.
”But the high price of poultry feeds has put my business on its lowest ebb. I cannot afford to spend a huge amount on buying feeds for the few birds available in my farm.”
Skyrocketing maize, soya beans prices
The poultry industry in Nigeria, according to the Central Bank of Nigeria (CBN), is the most commercialised of all Nigeria’s agricultural sub-sectors, with a current net worth of N1.6 trillion.
Speaking at a meeting with vice-chancellors of universities on the University-Based Poultry Revival Programme in Abuja on Monday July 6, 2020, the governor of the Apex bank, Mr. Godwin Emefiele, said the sub-sector contributes about 25 per cent of Agricultural Gross Domestic Product (AGDP) to the Nigerian economy.
He explained that the population of chickens was about 165 million, which he said produced approximately 650,000 metric tons and 300,00 metric tons of eggs and meat altogether.
The poultry industry feed cost is about 75 per cent of the cost of poultry production, and this, according to available industry data, has risen by over 75 per cent between March and December, 2020.
Although maize and soya beans are produced in large quantities by Nigerian farmers, there is also a high demand for maize for human consumption, and the amount produced locally is not enough for the production of feeds for the poultry industry, hence, the complementary importation of maize and soya beans.
Trouble however began in March this year when the CBN suspended the issuance of foreign exchange (FOREX) for the importation of maize via a circular signed on July 13 by the bank’s Director of Trade and Exchange, Dr. O.S. Nnaji, citing the need to boost local production of the cereal.
Form M is a document jointly used by the Ministry of Finance and the CBN to monitor goods that are imported into the country as well as enable collection of import duties where applicable.
Since the country went on a lockdown in the last week of March following the rising cases of Covid-19, the prices of maize and soya beans, which constitute major ingredients of poultry feed, have been skyrocketing, dealing a blow on small and medium livestock farmers and feed millers in the country.
A ton of maize, which used to cost N85,000 last years, now goes for N160,000 per ton, while soya beans, which was sold at N145,000 about the same period last year, has jumped to N250,000 per ton. Consequently, the price of finished feed which sold between N2,650 and N3,000 in March, is now selling at N5,300 per 25kg bag.
Worried by the outcry trailing the situation, President Muhammadu Buhari approved the release of 5,000 metric tons of maize from the National Strategic Grains Reserve to support the Poultry Association of Nigeria at subsidised rate.
According to the Federal Ministry of Agriculture and Rural Development, the President subsidised the cost to N90,000 per metric ton as against the (then) market price of N170,000.
A statement issued in Abuja by the spokesperson of the ministry, Theodore Ogaziechi, stated that the industry would heave a sigh of relief as the subsidised price of maize would help resolve the challenge of poultry feeds confronting the industry.
But the intervention was just a drop in the ocean as the industry has continued to bleed from the scarcity of the cereal due to the activities of feed millers and a syndicate involved in diverting the crop to neighbouring states where the grains are sold at exorbitant rates.
The chairperson of the Poultry Association of Nigeria, Ogun State Chapter, Mrs. Blessing Alawode, captured the helplessness of farmers in a recent interview, saying: “The poultry industry keeps birds for chicken and table eggs, and to get these, the chickens eat feed coming from maize, soya and other minerals. A normal poultry ration is made up of about 70 to 75 per cent maize and soya. Maize constitutes about 50 to 65 per cent, depending on the ratio we are preparing, and soya is 20 per cent and sometimes as high as 28 per cent.
“In the wake of the crisis in September, we alerted the government to the rising cost of maize, but it was a shock that there was a ban on the importation of maize. Unfortunately, we don’t have enough capacity locally to support our feed process. The poultry ration is made up of two additional materials, but the two most important are maize and soya. These two materials are currently not available, so it is not surprising that we are having a feed scarcity.”
How poor harvest, insecurity compounds farmers, millers’ woes
Poor harvest caused by bandit attacks have increasingly become a threat in northwest Nigeria in recent times with hundreds of farmers abducted, killed and displaced while Boko Haram insurgents have continued to plunder crops after attacking agrarian villagers in the northeast.
The hoodlums have also prevented the harmless farmers from going to their farms and demand that they pay millions of naira before they can be allowed to harvest grains.
Many farmers in the southwest region of the country have been displaced by herdsmen who ravage maize farms, with attacks on farmers in several communities in Ogun, Oyo, Ondo, Ekiti and other parts of southeast and south-south compounding the problems.
Alawode said: ”Soya is grown in Nigeria and maize is also grown in Nigeria. However, even before the security challenges we have across the northern states, there had been consistent importation of soya to support the big stakeholders, maybe quarterly or half yearly. We depend minimally on imported maize though.
“Now, given the ban on importation of the two, all of us now depend on local production. This year, we have seen the pattern of rainfall. In the South-West, the little they would have produced is distorted by the pattern of rainfall and the COVID-19 lockdown.
“On the other hand, a large chunk of our grains comes from the North and the North is currently challenged by insecurity. Intelligence report reveals that most farmers cannot go to their farms, so we grow maize locally and our production is inadequate to support us.
“Even the local maize cannot be fully maximised because of insecurity, and the South, which is not fully challenged, has pockets of issues, including herdsmen crisis here and there, and the pattern of rainfall,” Alawode noted.
There have also been reports of a syndicate comprising some Asian produce buyer, who have been buying up maize and soya beans from local farmers mainly in the northern region of the country.
Prices of eggs, chickens going up
The negative impact of feed scarcity, according to stakeholders, is the adverse effect it has had on egg and chicken prices in the country. With the unabated rise in feed prices, eggs and chickens might soon be out of the reach of many Nigerians.
Figures released by the National Bureau of Statistics (NBS) indicated that there was a sharp increase in the price of egg in August this year. The report, which was an outcome of a market survey carried out by the national data agency, revealed the figure was an increase from previous prices in April.
In the report tagged ”Selected Food Price Watch” data for August, NBS said the average price of one dozen of ‘agric’ medium-sized eggs increased from August 2019 to August 2020 by 3.70 per cent, while it increased between July and August by 1.02 per cent to N478.97 in August 2020 from N474.12 in July 2020.
”The average price of an ‘agric’ egg medium size (the price of one) increased by 5.44 per cent from August 2019 to August 2020.
”Also, the price increased between July and August by 0.76 per cent to N42.78 in August 2020 from N42.45 in July 2020,” the report stated.
Industry sources said the prices may further increase if grains scarcity persists in the country.
Checks carried out by The Nation at markets in Oko-Oba and Oja Oba markets in Agege and Ile-Epo, Oke Odo area of Alimosho revealed that eggs sold in crates (depending on size) which two months ago was sold between N850 and N900 is now selling between N1,150 and N1,200. Egg traders at the market attributed the price hike to high cost of feeds.
A chicken, depending on the size, according to Alawode, may be sold between N5,000 and N10,000 during the Yuletide.
“What I am trying to say is that at the end of the day, a smallholder is going to end every month at N300,000 loss going by feed at N4,500 and egg sold at N1000 per crate,” she added.
Her comment was echoed by Adekoya, who also noted that eggs and chickens’ prices would become unaffordable in view of feed scarcity.
”You can see that in the last few months, the price of a crate of egg has gone up from N850 to between N900 and N1,200 depending on the geographical location of markets in the country.
”Also, prices of chickens that stood between N2, 500 and N3,000 now hovers between N5,000 to 7,000 depending on sizes, and may reach N10,000 by Christmas and New Year celebrations if nothing is done to arrest the situation. The hike is as a result of feed scarcity and there’s nothing we can do about it except the government intervenes.”
Poultry farmers, millers closing shops as loss of 1om jobs looms
Unable to cope with rising cost of poultry feeds to feed their birds, not a few farmers have started selling off their birds at giveaway prices and closing down their businesses, according to the leadership of livestock farmers’ association.
Findings revealed that despite the crash in price from between N500 and N600 to N200, demand for day old chick has unprecedentedly declined.
Adekoya said: “I have had cause to sell off thousands of birds in my farm because I cannot afford to feed them with feeds now sold at exorbitant prices which had dealt a big blow on production cost as we now buy feeds almost at 100 per cent more than we bought them last year. I sold the birds at giveaway prices so as to recover a fraction of my investment and I have also reduced my workforce.”
Boma also said: “I shut down production in October after struggling for a few months to sustain production at a huge cost with low patronage by my customers, many of whom had also closed down their farms too.
“Painfully, I have also sent home many of my workers because I can no longer afford to pay their salaries and wages in the face of distressed poultry industry in the country.”
Toeing the same line, Ms Johnson told The Nation that she had placed her poultry on partial shutdown.
”The stark reality of galloping prices of feeds has forced me to partially shut down operations. I am currently selling off available birds at my farm in the Agbara area of Lagos,” she said.
A former General Secretary of Poultry Association of Nigeria (PAN), Dr Segun Makanjuola, also decried the loss being suffered by poultry farmers as a result of high cost of feeds.
He said: “We have about 160 million layers in Nigeria. If it takes us N5,000 to rear one, that is N800 billion, close to a trillion naira. I can vividly say that the volume of money we are losing now and what we can lose in total is far more than a trillion naira annually.”
In Ogun State alone, available statistics showed that about 20 per cent of poultry farmers have shut down their business and downsized workers in the last few weeks.
Alawode said: “Currently, not less than 15 to 20 per cent of the farmers have closed down and the bulk of this number is the smallholders with 500 to 2,000 birds.
“There is no way they can cope with the cost of production viz a viz the selling price. For instance, you buy seeds for N4,500 before salary and you have an average attendant who collects N20,000 per month.”
National President of Poultry Association of Nigeria (PAN), Ezekiel Ibrahim bemoaned the fate of livestock farmers and workers in the face of the feed crisis.
He said: “The effects of the above scenario are as follows: Closure of small and medium sized poultry farms thereby threatening about 5 million to 10 million jobs, especially at the peri-urban and rural areas; divestments in the poultry sector due to lack of investors’ confidence; devastating fall of fortunes in the entire value chains of the industry and the seeming crimes that will follow; high cost of eggs and poultry meat and the eventual non-availability of poultry proteins; significant drop in the contribution of poultry to the Agricultural Gross Domestic Product (AGDP) of the national economy thereby negating the government drive for agricultural transformation, drawing back the poultry industry to the pre-2005 poultry development years.”
Dr Segun Makanjuola, a former general-secretary of PAN, said: “We have about 160 million layers in Nigeria. If it takes us N5,000 to rear one, that is N800 billion, close to a trillion naira… I can vividly say that the volume of money we are losing now and what we can lose in total is far more than a trillion naira annually.”
The way forward, by experts
Experts have suggested a number of remedies to the current feed crisis rocking the industry, including suspension of the ban on importation of maize and soya beans, reopening of borders and direct financial support for poultry farmers in the country.
According to Ibrahim, these immediate interventions would go a long way in bringing relief to the industry.
He said: ”We therefore wish to suggest the following ways as the possible pathways and solutions to salvage the poultry industry: halt with immediate effect the export of Soya beans and Soya meal so as to protect the local food systems and security; partially keep the borders open for markets in agriculture and critical food products in a transparent and predictable manner, but not the export of under produced foods either formally or informally; allow for the immediate importation of Soya beans and maize into the country as a stop gap measure to mitigate the impending doom in the Nigeria poultry industry; the government and its relevant agencies should engage with the association on constant basis on issues that affect the industry before critical policy decisions are taken in order to remove most of the ambiguities in policies that affect the industry and the generality of Nigerians.
He added: ”In order to assist the industry achieve its target and get prepared to participate in the African Continental Free Trade Agreement (AFCTA), duty and other taxes exemptions should be granted for the importation of maize and soya beans.
“Government should try its possible best to secure the country free from criminals so as to enable serious farming while also encouraging the commercial production of maize and soya beans with proven technology and farming practices.”
Proffering remedy to the problem, Alawode called for urgent government intervention in preventing hoarding of maize and soya beans.
“The little maize and soya beans we are able to produce locally is insufficient. We gathered that some merchants and millers are exporting processed soya out of Nigeria.
“We gathered that the government, one way or the other, has gathered some aggregators with funds, who are buying maize and hoarding it despite the insufficient production that we are battling with, so that at the peak of harvest, when price is supposed to be at the lowest, we are paying N160,000 for a ton of maize against N85,000, and we are paying N225,000 to N240,000 for a ton of soya as against N145,000 about this time last year.
“So, we will like that the government steps in by immediately banning the activities (of people) that are going around the export of the produce for the food security of the nation.
‘’We are also pleading that through the government agencies and empowerment programmes they have done around maize, they should give the poultry farmers the opportunity to participate in the off-take business.”
